Federal government says pipeline construction will continue

Alberta’s premier says his office will be speaking with B.C. Premier John Horgan’s office today to encourage continuing construction to twin the controversial Trans Mountain pipeline from Alberta to Burnaby for oil shipment.

Jason Kenney’s comment came the day after B.C.’s Court of Appeal said the province’s environmental approval of the controversial Trans Mountain pipeline must return to the provincial government for reconsideration as a result of changes in conditions that led to the approval certificate being granted.

“Premier Horgan has been clear that the B.C. government will continue to issue permits as he is required to do by law,” Kenney said in a media conference call from New York, where he is promoting Alberta business, particularly in the energy sector.

Kenney said he is currently in the United States meeting with investors to “restore investor confidence” in the province. He singled out the energy industry. He said recent drone strikes against Saudi Aramco oil facilities in Saudi Arabia underline the need for Canada as stable source of energy.

Justice Mary Saunders, writing the appeal court’s two unanimous decisions, said, “I would not quash the certificate but would remit the matter to the ministers to permit them to reconsider the certificate’s conditions.”

She said those conditions have changed in the wake of the Federal Court of Canada’s decision in Tsleil-Waututh Nation v. Canada quashing the federal approval of the project by the National Energy Board (NEB) – which has since changed its name to the Canada Energy Regulator (CER) – and the federal cabinet.

Alberta’s premier said a response to the decisions would be to revisit supplemental federal decisions on moving the pipeline forward and incorporate those into a new B.C. report on the pipeline.

Kenney said he understands B.C.’s government would not use the rulings to obstruct project construction.

The pipeline project would see Trans Mountain twinned from Alberta to a tank farm and docks in Burnaby. It is estimated the project would precipitate a seven-fold increase in petroleum shipments in B.C. waters, a concern for B.C.’s government, environmentalists and aboriginal groups. Indeed, it was the Squamish First Nation, along with the City of Vancouver, that began the cases resulting in the court decisions.

The twinning of the 1953-vintage, 1,150-kilometre pipeline between Edmonton and Burnaby would have a nominal capacity increasing from 300,000 barrels per day to 890,000 barrels per day.

Kenney said there is increasing political support for the project across Canada, including in B.C.

“I believe the political opposition is actually diminishing,” he said, noting various aboriginal groups are vying for participation in the project.

Now, B.C Environment Minister George Heyman said Victoria would be reviewing the court’s decisions to determine a course forward.

"We're not able to stop the project, Heyman said Sept.17. "That's in federal jurisdiction. Only the Federal Court of Appeal can stop this project."

Ottawa re-approved the $7.4 billion pipeline in June after purchasing it from Kinder Morgan in early 2018 for $4.5 billion.

And, said Canada’s Minister of Natural Resources Amarjeet Sohi, the ruling does not impact continuing construction.

He said the B.C. environmental assessment certificate for the pipeline remains valid.

“The court invited the Government of B.C. to review the conditions in the certificate under provincial authority in light of the 2019 report of the Canada Energy Regulator,” Sohi said. “The government of Canada continues to move forward with the Trans Mountain Expansion Project.”

McMillan LLP partner Robin Junger, national co-chair of the law firm's environmental and aboriginal law groups and co-chair of its B.C. oil and gas group, doesn’t consider the court rulings major decisions for the project.

“It just requires the province to consider whether it feels changes to the conditions are required, and it did not quash the original certificate,” he said. “From a legal perspective, I do not recall seeing other cases that have ordered reconsideration where the underlying approval was not quashed, but that is more an issue for lawyers and academics than the project itself.”

Asked if this could allow the Horgan government to add additional onerous conditions that might add further delays, Jnger said, "I suppose anything is possible; any additional conditions and/or changes to conditions would have to be reasonable in the circumstances (flowing from consultations that occurred after the original decision), or they would be subject to challenge by TMX. And since B.C. cannot stop the project in any case, I expect it is unlikely any changes to provincial conditions would delay the project.”

In January 2017, British Columbia’s Liberal government issued a 37-condition environmental assessment certificate for the project. The government did so relying on a so-called equivalency agreement with the NEB that could stand in for a provincial assessment in the interests of efficiency.

That approval had adopted project conditions recommended by the NEB.

It is the conditions that the court of appeal has remitted to the Environmental Assessment Office for review.

Heyman said while the government continues to believe the project is “wrongheaded,” the government will proceed with a review with a view to protecting B.C.'s coastline, the environment, jobs and tourism.

A Trans Mountain statement said the company is continuing with project construction and planning “is committed to building the expansion in a manner that minimizes impacts to the environment and respects the values and priorities of Canadians.”

The court suggested Victoria review the amendments to the federal CER Reconsideration Report to determine whether they impact the provincial conditions that are placed on the project.

That is what Kenney is encouraging B.C.’s government to do.

Heyman said the issue now is the creation of a process to perform that task.

The Trans Mountain statement said the court affirmed B.C. is limited to making adjustments or additions to the provincial marine conditions and must do so within the limited scope of provincial authority over marine issues.

Two decisions come on appeal of lower court rulings in which the Squamish Nation and the City of Vancouver both applied by petition for an order setting aside the B.C. government’s decision to issue an environmental assessment certificate for the doubling of the pipeline to move petroleum products from Alberta to the B.C. coast.

The city said in a statement it is pleased the court has partially allowed its appeal, saying the project would have “significant environmental impacts, including the unacceptable risk of oil spills and increased greenhouse gas emissions related to the project at a time when the world needs to reduce emissions.”

The Squamish First Nation said Victoria must heed the court decision and conduct a comprehensive environmental review of the project to protect healthy marine and aquatic environments and the existence of the southern resident killer whale.

Since Grauer’s decision, the Federal Court of Appeal released its judgment in Tsleil-Waututh.

In Tsleil-Waututh, the federal court identified deficiencies in two areas of concern: one being the NEB assessment of the risks inherent to marine shipping and certain environmental effects of the expansion project, and the second being the adequacy of Canada’s consultation process with Indigenous groups in respect to its decision to approve the project.

The court said marine shipping associated to the project is expected to increase nearly seven-fold from current levels.